Ocean Bay Mart, Inc. v. The City of Rehoboth Beach, Delaware

• Court: Court of Chancery of Delaware
• Decided: April 13, 2021
• Docket: CA No. 2019-0467-SG
• Status: Published

Opinion

COURT OF CHANCERY OF THE SAM GLASSCOCK III VICE CHANCELLOR STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE 34 THE CIRCLE GEORGETOWN, DELAWARE 19947

Richard A. Forsten, Esq. Max B. Walton, Esq. Pamela J. Scott, Esq. Stephanie S. Riley, Esq. Elizabeth S. Fenton, Esq. Brandon R. Harper, Esq. SAUL EWING ARNSTEIN CONNOLLY GALLAGHER LLP & LEHR LLP 267 East Main Street 1201 Market Street, Suite 2300 Newark, DE 19711 Wilmington, Delaware 19801

RE: Ocean Bay Mart, Inc. v. The City of Rehoboth Beach, Delaware, C.A. No. 2019-0467-SG, Cross-Motions for Summary Judgment

Submitted: January 29, 2021 Decided: April 13, 2021

Dear Counsel:

I have before me the parties’ cross-motions for summary judgment. It appears

to me that this case turns, in part, on a very narrow factual issue. That is, whether

the Plaintiff, when it began planning its redevelopment as a condominium rather

than a subdivision, was entitled to rely in good faith on its interpretation of the City

Code existing at the time. The City has proffered deposition testimony indicating

that the Plaintiff believed that the City Code was “fairly confusing at least for an

amateur and even somewhat confusing for experts”1 and argued that the Plaintiff

1 Def.’s Opening Br. in Supp. of its Mot. for Summ. J. and Answering Br. in Opp’n to Pl.’s Mot. for Summ. J. 6 n.8, Dkt. No. 40 [hereinafter “Def. OB-AB”]. purposefully avoided submitting his redevelopment plan to the City for concept

review because it feared the City could close the loophole the Plaintiff believed it

had found in the City Code.2 The Plaintiff has pointed to deposition testimony

suggesting that the Plaintiff believed that its redevelopment could be done as a

condominium if drafted and built correctly, as well as statements from various City

officials indicating that the Plaintiff could redevelop as a condominium. The

stipulated timeline submitted by the parties, while helpful, does not resolve the issue.

Accordingly, the factual issue of good faith reliance, at least, in support of which

both sides have proffered deposition testimony, in my view, is best resolved through

development of a record at trial.

The parties may consider their summary judgment briefing as pre-trial briefs.

For the foregoing reasons, the parties’ cross-motions for summary judgment

are DENIED.

IT IS SO ORDERED.

Sincerely,

/s/ Sam Glasscock III

Sam Glasscock III

cc: All counsel of record (by File & ServeXpress)

2 Def. OB-AB 7. 2